ECONOMIC DEVELOPMENT REPORT DOWNTOWN RALEIGH SECOND QUARTER 2017

Transcription

1 ECONOMIC DEVELOPMENT REPORT DOWNTOWN RALEIGH SECOND QUARTER 2017 The Downtown Raleigh Alliance produced this quarterly report. The Alliance is an award-winning nonprofit organization whose mission is to continue to revitalize Raleigh s downtown by enhancing its quality of life and contributing to its economic success (For more information, visit The City of Raleigh is a key partner of the DRA in its economic development efforts to revitalize downtown. DRA receives a grant from the city to enhance its tax base by generating new jobs, supporting existing businesses, and attracting new businesses in particular storefront businesses. For questions concerning this report, please billking@downtownraleigh.org.

2 Economic Development Report Downtown Raleigh TABLE OF CONTENTS ECONOMIC DEVELOPMENT REPORT Highlights... 1 Real Estate & Population Snapshot... 2 Historic Trends... 3 Second Quarter Street-Level Business Activity... 4 Development Under Construction and in Planning... 6 Development Delivered in Food and Beverage Tax Revenue... 9 Disclaimer The information contained herein has been obtained from sources deemed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or representation about it.

3 Economic Development Report Downtown Raleigh ECONOMIC DEVELOPMENT REPORT HIGHLIGHTS Downtown s second quarter saw new street-level businesses open, more major construction projects, and several new buildings completed or near completion. An estimated 3,670 residential units are either under construction, planned to begin construction in the next year or already opened in 2015 and Downtown now has over 5,000 residential units in existence, including 1,804 units delivered since the start of At least $1.75 billion in projects are under construction, were delivered in 2015/2016 or planned/announced for downtown in the near future with several more major projects yet to announce their total investment figures. Food and beverage sales are up 9% in 2017 versus the first half of 2016 with sales already topping $100 million this year and on pace to break last year s record of $202 million in downtown food and beverage sales. In the 2nd quarter, 12 new street-level businesses opened ranging from soft goods retail to restaurants and bars with a three more businesses already open in 3rd quarter and at least 12 more street-level businesses on the way. Since the start of 2016, downtown has seen 69 new street level businesses open. Announcements North Carolina FC, the Triangle s professional soccer team, announced a plan to build a stadium and mixed use development on land in the state government complex in downtown. The stadium would seat 22,000 fans and include new towers for state employees, retail, and residential units, as part of the club s bid for a top division, Major League Soccer franchise. Over 1.75 billion in projects are currently under construction ($312 million) completed construction ($512 million) or in planning ($875 million+). More investment is certain, as investment figures are not yet available for some announced projects. Also, public investment is strong with $200 million in public projects either underway, planned or completed including greenspace renovation at Moore Square and transit centers at Union Station and the recently renovated GoRaleigh Transit Center. Office Market FNB Bank announced their re-location to downtown where they will occupy space at FNB Tower, a planned 22- story mixed use development on Fayetteville Street. VitalSource, a tech company located on Fayetteville Street, announced an expansion that will bring more jobs and requires leasing another floor of office space, bringing their footprint to 33,151 sf. Downtown company, Pendo, has raised $45 million in capital since December 2016, as the company continues to grow rapidly. Construction continues on The Dillon, a 17-story office tower in the W a r e h o u s e D i s t r i c t. O t h e r forthcoming buildings include 400H and One Glenwood, which will all feature significant office allocations. HQ Raleigh is expanding its footprint with the addition of more space to incubate companies in downtown at the Capital Club Building, Centerline headquarters in Glenwood South, and next to the current HQ Raleigh building. Office vacancy improved with a decrease into single digits at 8.9% with Class A at 11% and Class B at 2.3% vacancy for the 2nd quarter. (Source: JLL) Retail & Storefront Market During the first quarter, 12 new street -level businesses opened in downtown. Included in that total are new grocery/bodega, children s bookstore, and five new restaurants. Retail has had a strong 2017 with seven new store openings and more on the way. At least 12 more street-level businesses have been announced or confirmed and are expected to open during the next few months including retail, restaurants, and bars. Downtown s first national clothing retailer, Urban Outfitters, announced their new location opening in 2018 at The Dillon in the Warehouse District. Residential Market Construction continues on another 425 units including The Dillon and s e v e r a l t o w n h o m e p r o j e c t s throughout downtown. Since 2015, 1,804 units have been delivered and more than 1,400 units are planned for the near future. Dining & Hospitality Market Food and beverage sales are up 9% in 2017 vs YTD. Fayetteville Street and Warehouse districts have the highest gains in 2017 with over 17% and nearly 15% more sales respectively versus the first two quarters of In total, there are now more than 240 restaurants, cafes, and bars/clubs/lounges in downtown. Residence Inn by Marriott opened their $30 million, 175 room hotel this month, which are the first new hotel rooms in downtown since Additionally, 982 more rooms are planned. 1

4 Economic Development Report Downtown Raleigh REAL ESTATE & POPULATION SNAPSHOT REAL PROPERTY SQUARE FOOTAGE WITHIN THE MSD Existing Space Commercial Office Retail Governmental Office/Other Residential Other (Education, Religious, etc.) Total Existing Space Square Feet 7,259,714 1,422,280 6,964,275 4,542,147 5,330,977 25,237,393 Total Under Construction Space Combined Existing, Under Construction and Planned 1,170,455 30,651,747 DOWNTOWN HOTEL ROOMS Existing Rooms Planned (announced # rooms) 1, RESIDENTIAL UNITS Existing Units Inside Downtown Planned and Under Construction (P & UC) Residential Units Combined Existing, P & UC Units 5,546 1,866 7,412 P = Planned, UC = Under Construction, A = Announced POPULATION DESCRIPTIVE STATISTICS Residents Estimated Within Downtown Residents Within 1-mile Radius of Downtown Center Point Average Household Income Within 1-mile Radius of Downtown Housing Units Within 1-mile Radius Average Household Size Within 1-mile Radius % of Residents With Bachelor s Degree or Higher Median Age for Residents Within 2-mile Radius 8,212 16,550 $51,687 6, % 32.8 years Sources: DRA Internal Tracking, U.S. Census 2

5 Economic Development Report Downtown Raleigh HISTORICAL TRENDS Street-Level Business Openings Street-Level Business Closings Year-End Office Occupancy 89.6% 89.9% 89.2% 93.3% 89.9% 89.4% 88.6% 91.1% Public Investment started or underway $2.5 $0 $205 $187 $0 $91 $169 $125 Private Investment started or underway but not completed (millions) $9.6 $106.5 $117.5 $351 $133 $261 $242 $188 Projects Completed Total Investment completed (millions) $7.4 $22.3 $29.8 $156 $115 $260 $174 $75 60 Street-level openings and closings ( ) Number of closings Number of openings Sources: DRA internal tracking, 3

6 Economic Development Report Downtown Raleigh 2nd QUARTER 2017 STREET-LEVEL BUSINESS ACTIVITY Business Openings: Name Type 1. Read With Me Retail 2. Trolley Pub Beer Shop Retail 3. Oak City Market Retail 4. Voda Boutique Retail 5. Chisel Studio Fitness 6. La Santa Restaurant 7. St. Roch Oyster + Bar Restaurant 8. Mulino Italian Kitchen and Bar Restaurant 9. Dominos Pizza Restaurant 10. Cortez Seafood & Cocktail Restaurant 11. Watts and Ward Bar 12. The Parliament Bar Business openings in early 3rd Q 2017 Name Type 1. MOFU Shoppe Restaurant 2. Benny Capitale s Restaurant 3. Tulum Restaurante & Bar Restaurant Business closings in 2nd Q 2017 Name Type 1. Quiznos Restaurant 2. More. Restaurant 3. Mosaic Bar 4. Office Tavern Bar 5. Dogwood Collective Retail 6. Rollins Economy Cleaners Personal Service See next page for announced businesses coming soon. 4

7 Economic Development Report Downtown Raleigh STREET-LEVEL BUSINESS ACTIVITY Business Announcements (Coming Soon) 1. Poolside Pie Restaurant 2. Wahlburgers Restaurant 3. Growler USA Restaurant/Bar 4. Oakwood Pizza Box Restaurant 5. Tama Tea Restaurant 6. Urban Outfitters Retail 7. Harris Teeter Retail 8. Morgan Street Food Hall Retail/Food hall 9. Speakeasy Bar Glenwood Bar Lounge & Discotorium Bar 12. YMCA Fitness 5

8 DOWNTOWN RALEIGH DEVELOPMENT INVESTMENT Project Name Investment Project Type Sq. Ft. Res. Units District UNDER CONSTRUCTION Union Station $87,950,000 Infrastructure 42,000 n/a Warehouse The Dillon $150,000,000 Mixed Use 210,000 (office), 40,000 (retail), 541,000 total 262 Warehouse Capital Blvd bridges/interchanges $36,900,000 Infrastructure n/a n/a Capital Morgan Street Food Hall $2,200,000 Food Hall/Retail 22,000 n/a Warehouse Transfer Co. (Stone s Warehouse) $19,000,000 Mixed use (retail/ residential) 42,000 (retail) 15 Moore Square Hargett Place Not announced Townhomes 44, Moore Square 10Arros Not announced Townhomes n/a 10 Moore Square HQ Raleigh expansion (Capital Club) Not announced Incubator expansion 14,000 n/a Fayetteville St. The Saint Not announced Apartments 66, Glenwood South Boylan Flats Not announced Apartments 44, Glenwood South Capital Boulevard Self Storage Not announced Storage 123,000 n/a Seaboard/Capital West at Lenoir Not announced Townhomes 24, Warehouse 611 West South Not announced Residential 80, Warehouse Self Storage Facility Not announced Storage 123,000 n/a Warehouse Restaurant at 502 W. Lenoir Not announced Restaurant 4,583 n/a Warehouse TOTAL UNDER CONSTRUCTION $ 312,950,000 1,170, residential units *Note that The Metropolitan Apartments were under construction, but destroyed by a fire in March. The developers have indicated a desire to rebuild, but no timetable has been set, as such the development has been moved to Planned. Repairs are ongoing to several nearby buildings, too. 6

9 PLANNED DOWNTOWN RALEIGH DEVELOPMENT INVESTMENT Project Name Investment Project Type Sq. Ft. Units District City Centre (301 Hillsborough St.) $160,000,000 Mixed Use 220,000 (office), 40,382 retail. 1,121,576 total hotel rooms Glenwood/ Warehouse Moore Square renovation $12,600,000 Infrastructure 4-acre park n/a Moore Square FNB Tower $110,000,000 Mixed Use One Glenwood Not announced Office/mixed use Two Glenwood Not announced Hotel/parking structure 150,000 (office) 389,702 total 219,500 (14,500 retail) 331, Fayetteville St. n/a 150 hotel rooms Glenwood South Glenwood South Metropolitan Apartments** $52,000,000 Apartments/Retail 274, Glenwood South Smokey Hollow (Peace and West St) $100,000,000 Mixed Use 652, Glenwood South The Edison (Office) Not announced Office/retail 303,000 n/a Moore Square 400H Not announced Office/retail/ residential 144,000 (office), 16,000 (retail) Hilton Garden Inn/Homewood Suites Not announced Hotel 260,890 Hotel at Wilmington and Lenoir Streets Not announced Hotel Not announced Courtyard Marriott Not announced Hotel 192, Glenwood South 259 hotelrooms 145 hotel rooms 192 hotel rooms Fayetteville St. Fayetteville St. Fayetteville St. HQ Raleigh expansion (new building) Not announced Office 25,000 n/a Warehouse Exploris School Gateway $20,000,000+ Educational institution 355,889 n/a Fayetteville St./ Gateway 522 S. Harrington St. Not announced Mixed use/residential 103, Warehouse Fourth Ward Not announced Residential 19, Warehouse Boutique hotel at 615 W. Peace St. Not announced Hotel Not announced 60 Glenwood South Boylan Pearce Bldg. Not announced Mixed Use 31,820 n/a Fayetteville Street North Carolina FC Stadium Not announced Stadium, office, residential, retail n/a n/a Capital Peace Street streetscape project $2,000,000 Infrastructure n/a n/a Glenwood South TOTAL PLANNED 1,441 residential units 982 hotel rooms Note: these projects are subject to change and should be considered estimates based on public information. Additionally, several projects have not finalized their investment total. As such, planned investment dollars are likely higher and project costs likely to change. ** Damaged in fire, plans to rebuild. 7

10 DOWNTOWN RALEIGH DEVELOPMENT INVESTMENT Project Name Investment Project Type Sq. Ft. Res. Units District COMPLETED Since Start of 2015 GoRaleigh Transit Center renovation $9,900,000 Infrastructure n/a n/a Moore Square Residence Inn by Marriott $20,000,000 Hotel 150, rooms Fayetteville St. The Edison Lofts $55,000,000 Apartments/Retail 290, Moore Square The Ten at South Person $2,400,000 Townhomes 16, Moore Square Bank of America Plaza renovation $11,000,000 Office Renovation n/a Fayetteville St The Lincoln $35,000,000 Apartments 318, Fayetteville Street 107 Fayetteville St. $1,220,000 Office 13,000 n/a Fayetteville Street Holy Trinity Anglican Church $11,000,000 Place of Worship 25,000 n/a Capital Raleigh Beer Garden $2,000,000 Bar 8,670 n/a Glenwood South Charter Square $63,000,000 Office 243,379 n/a Fayetteville St SkyHouse Raleigh $60,000,000 Apartments 358, Moore Square The L $17,000,000 Apartments 110, Fayetteville St 200 S. Salisbury (Death and Taxes) $3,000,000 Restaurant 10,903 n/a Fayetteville St Devon Four25 $35,000,000 Mixed Use/residential 227, Glenwood South Carolina Ale House $7,500,000 Dining & Bar 37,048 n/a Glenwood South Peace Street Townes $5,000,000 Townhomes 20, Capital McClatchy Interactive office renovation/ expansion $3,600,000 Office 30,000 n/a Fayetteville St Taverna Agora $4,200,000 Restaurant 4,900 n/a Capital Elan City Center Apartments $30,000,000 Apartments 241, Capital Link Apartments $30,000,000 Apartments 276, Glenwood South Exchange and Market Plazas renovation $2,000,000 Civic Space n/a n/a Fayetteville St. 227 Fayetteville St. $9,000,000 Office 101,439 n/a Fayetteville Street Blount St. Commons $8,000,000 Townhomes Not available 46 Capital The Gramercy $30,000,000 Apartments/Retail 168, Glenwood South Dr. Pepper Warehouse $3,200,000 Office 14,000 n/a Warehouse Christ Church addition $7,500,000 Albermarle Building renovation $42,000,000 Place of Worship addition State office renovation n/a n/a Capital 192,370 n/a Capital Google Fiber office $3,000,000 Office 9,926 n/a Glenwood N. West St. Development $5,300,000 Renovations 24,000 total n/a Glenwood TOTAL DELIVERED $ 515,820,000 2,788,214 1,804 8

11 2017 YTD FOOD AND BEVERAGE SALES IN DOWNTOWN Wake County collects a 1% tax on all food and beverage sales in the county, which provides an estimate of overall food and beverage sales. Sales at food and beverage establishments in downtown Raleigh are up 9% through the first two quarters of 2017 vs Downtown has seen 46% growth in food and beverage sales for first half of 2017 vs. the first half of $120,000, Food and Beverage Sales Through 1st and 2nd Quarter: $100,000, $80,000, $60,000, $40,000, $20,000, $ Sources: Wake County Tax Assessor 9

12 2nd QUARTER FOOD AND BEVERAGE SALES IN DOWNTOWN Food and beverage sales for downtown were up 13% for 2nd quarter 2017 versus 2nd quarter Downtown restaurants and bars are continuing their strong performance from 2016 when they topped $200 million in sales for the year. $70,000, Food/Bev Sales 2nd Quarter: $60,000, $50,000, $40,000, $30,000, $20,000, $10,000, $- 2Q Q Q Q Q 2017 Sources: Wake County Tax Assessor 10

13 FOOD AND BEVERAGE SALES DISTRIBUTION BY DISTRCIT Due to strong sales this year, Fayetteville Street district is now even with Glenwood South in share of food and beverage sales. Fayetteville Street district has seen a 17.6% growth in sales in Warehouse district has seen the second largest growth with sales up 14.9% over last year and now holds a 9% share of sales, which is an increase from the previous quarter. Moore Square remains 20% of downtown food and beverage sales, while Wake County now provides data on the Capital district which has 3% of downtown s sales. Distribution of Food/Bev Sales By District: 2nd Q % 9% 34% 20% 34% Glenwood Fayetteville Moore Square Warehouse Capital Sources: Wake County Tax Assessor 11

14 FOOD AND BEVERAGE SALES GROWTH BY DISTRCIT All districts in downtown have seen substantial growth in food and beverage sales since 2013 with the Warehouse district seeing the largest percentage gains with over 50% more sales in the past four years. 60% Growth in Food/Bev Sales By District YTD: 2013 vs % 40% 30% 20% 10% 0% Glenwood Fayetteville Moore Square Warehouse Sources: Wake County Tax Assessor 10